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The Situation

​We just start to realize how deep the correction last summer was on the ​​​US equity market: On the low made on August 24 2015 on the Dow Jones ​Transportation ( DJT ) at ​7452.70, even if few realize that the DJT now trade ​well below that level. ​(See first chart below: Amber Trendline)​​​ The Mighty Dow Jones Transportation Average Index (DJT) is in bad technical shape but lately started to outperformed tremendously.

Here is some Technical Observations:​​​​1) DJT is at 20.7% from its bottom reached on January 20 2016 andSP500 is at only 11.9%​​​​ and in a steep uptrend channel. (See first chart below)​ ​​​2) DJT from highest peak price ( reached on November 28 2014 ) to the lowest price yet ( reached on ​January 20 2016 ) was 31.2% and only 15.2% for the Mighty SP500. ​​​​(See first chart below)​

​​​​3) DJT is testing the Weekly Major Support Trendline that started back on October 2014.​​​​(See chart below - Thick Yellow Trendline)​

​​​​​​​4) DJT is back above the Weekly Major Support Trendline that started back on March 2009.5) ​​It is the first time since July 27 2015 that we have that ratio (Dow Jones Transportation ​to the Mighty Dow Jones Industrials) getting above the 50 DMA ( Day Moving Average ) ​​(See second chart below - Red Line - Ellipse)​ and near previous break down zone. ​​(See second chart below - Amber Trendine - Ellipse)​

​​6) ​​It is the first time since July 28 2015 that we have that ratio (Dow Jones Transportation ​to the Mighty SP500 Index) getting above the 50 DMA ( Day Moving Average ) ​(See third chart below - Red Line - Ellipse)​ and near previous break down zone. ​​(See third chart below - Amber Trendine - Ellipse)​ ​As the ​​​​​Dow Jones Transportation ​is finally rebounding strongly, Bulls need a weekly close above the previous break down Major Trendline that started back on October 2014 to see a bigger bull impulse ​​(See First Chart - Thick Yellow Trendline - Ellipse) and test the ultimate 200 DMA (Day Moving Average)​​​ (See First Chart - Thick Green Line) The Dow Jones Transportation ​is obviously at Technical Crosroads.